Today, Avista filed a request with the Washington Utilities and Transportation Commission (Commission) to increase rates for electric and natural gas customers in Washington. Here are the details about the request:

Electric

The filing includes:

·a request for a 6.7 percent increase in revenues, primarily for capital investments

·a request to increase the monthly basic charge from $8.50to $14.00

Bill impact:

The bill impact for a customer using an average of 966 kilowatt hours per month would be, if approved:

·A total billed increase of $6.45 per month or 7.9 percent

·A revised monthly bill of $87.67

Natural Gas

The filing includes:

·a request for an increase in revenues of 6.9 percent

·a request to increase the monthly basic charge from $9.00 to $12.00

Bill impact:

The bill impact for a customer using an average of 68 therms per month would be, if approved:

·A total billed increase of $5.41 per month or 7.9percent

·A revised monthly bill of $73.57

Timing

This request will take time to be approved. In Washington, this can take up to 11 months, during which time the Commission will thoroughly review Avista’s request and costs as well as relevant data and take public comments. Once reviewed, the Commission will approve rates they feel are reasonable and fair. You may hear updates in the process in the coming months.

The cost of energy and customer rates

The main driver in the requests is the continuing need to expand and replace the facilities and equipment we use every day to serve you, our customer. These investments include upgrades and maintenance of generation facilities, transmission and distribution equipment, natural gas pipe and information technology upgrades.

Keeping rates fair and reasonable for our customers is a key part of our decision making. It’s a balance. The cost to produce energy continues to rise, as does the cost to generate and distribute this energy.

What does this investment look like?

Below are some of the capital projects and investments that are included in the rate request.

Nine Mile Powerhouse Project

We are in the midst of a multi-year project to rehabilitate the Nine Mile Powerhouse, which is 107-years-old. The project is underway to replace turbine-generator units, and other equipment that will increase the generation of clean, renewable power. In 2013, the last two (of four) original turbine-generating units were removed to make way for the new, more efficient units. Work in the powerhouse to install the new units began in 2014 along with a new warehouse, barge dock and crane pad.

Customer Information System and Enterprise Asset Management System

Avista’s customer information system is the foundation of our day-to-day customer operations. The system touches all of our customers and supports traditional utility business functions, such as meter reading, customer billing, payment processing, credit, customer service orders and material management. For 20 years, the system has been meeting the needs of our customers and the company, but like pipe, wires and equipment, over time it needed to be replaced. Years of work and investment in technology led to the launch of the new system in early February 2015.

Natural Gas Pipe Replacement

Avista continues a major project to systematically replace portions of older natural gas distribution pipe. The project is replacing hundreds of miles of natural gas pipeline to support a continuation of reliable service for our customers. In 2015, work will take place across all three states we serve, including Spokane, WA, Post Falls, ID, Lewiston, ID, Medford, OR and more. Learn more about this work and view all locations scheduled for 2015 here.

Advanced Metering Infrastructure (AMI)

Avista continues to invest in modernizing our grid to meet current and future energy needs. In 2015, Avista is planning for the deployment of Advanced Metering Infrastructure (AMI) in Washington. This multi-year AMI project includes installing advanced meters, beginning in 2016.

Advanced meters allow for two-way communication between Avista and customers. The technology creates the foundation for future customer benefits, including faster outage detection and restoration of service, plus near real-time energy use information and energy usage alerts. These capabilities will allow customers to better understand and manage their energy use.

Learn more about the rate-making process. Watch this video. Read this one-sheet.

On Nov. 25, 2014, Avista received approval from the Washington Utilities and Transportation Commission (Commission or UTC) on the all-party settlement in our electric and natural gas general rate case. New rates will take effect on Jan. 1, 2015.

You may recall we filed a general rate request on Feb. 4, 2014 to increase electric and natural gas base rates in Washington that would support the ongoing need to expand and replace the facilities and equipment we use every day to serve our customers. This approval from the Commission concludes the rate case and supports these efforts.

What Does This Mean?

The Commission’s approval will increase electric and natural gas base rates as well as account for new and expiring rebates. Base rates are those that cover the total cost of providing electricity and natural gas service to customers. This includes generating and purchasing energy as well as the delivery of that energy to customers.

The overall change in customer billing rates, including the expiring and new rebates, is 2.5 percent for electric customers and 5.6 percent for natural gas customers.

Residential Customer Bills Based on Average Usage

Electric – residential customer using an average 965 kilowatt hours per month

·Total billed increase of $2.10 a month or 2.7 percent

·A revised monthly bill of $81.13

·An increase in the monthly basic charge from $8.00 to $8.50

Natural Gas - customer using an average of 65 therms per month

·Increase of $3.70 or 6.0 percent

·A revised monthly bill of $64.89

·An increase in the monthly basic charge from $8.00 to $9.00

The bill increase for each customer group (e.g. residential, commercial) may differ due to adjustments to better reflect the cost to serve each customer group.

For more details, read the new release here and the blog regarding the settlement here.

Learn more about the rate-making process here. You can also watch this video and read this one-sheet.

Over the last couple of months, we’ve told you about annual rate adjustments that we have filed with our utility commissions in each of the states we serve. These included annual Purchased Gas Cost Adjustments (PGA) filed in Washington, Idaho and Oregon, the Idaho Power Cost Adjustment (PCA), and rate adjustments in the Washington and Idaho Residential Exchange Programs.

Purchased Gas Cost Adjustment (PGA)

Power Cost Adjustment (PCA)

Residential Exchange Program

The PGA is an annual adjustment that balances the actual cost of wholesale natural gas purchased by Avista with the amount already included in current rates - we do not mark up the cost of natural gas to meet customer needs. We are required to file the PGA each year, and costs can go up or down, based on the cost of wholesale natural gas.

The PCA is an annual rate adjustment in Idaho made to reflect certain differences between Avista’s actual cost of generating and purchasing electric power to serve customers and the cost currently included in customer rates.

The Bonneville Power Administration (BPA) Residential Exchange Program provides a share of the benefits of the federal Columbia River power system to the residential and small farm customers of the investor-owned utilities in the Pacific Northwest. We apply the benefits we receive, which typically fluctuate from year to year, to customers as a credit on their monthly electric bill.

These rate adjustments, filed between July 30, 2014 and Sept. 15, 2014, have been approved by the various utility commissions, and customers will begin seeing these in reflected in their monthly utility bills, as of Oct. 1 (Idaho PCA and Idaho Residential Exchange Program) and Nov. 1 (all other filings). Below are the details of each of these adjustments in each state.

Idaho

Filing

Details

Purchased Gas Cost Adjustment (PGA)

Residential customer bills based on average usage of 60 therms per month:

·Decrease of $1.16 or 2 percent

·Revised monthly bill of $58.32

Power Cost Adjustment and Residential Exchange Program

Residential customer bills based on average usage of 930 kilowatt hours per month:

Today, we announced we have filed two annual rate adjustment requests in Washington that, If approved by the Washington Utilities and Transportation Commission (UTC or Commission), would slightly decrease electric rates and slightly increase natural gas rates.

You may recall that we told you about a settlement that we reached in Washington that would raise base retail rates beginning Jan. 1, 2015, if approved, and wonder why we are talking with you about your rates again.

The Purchased Gas Cost Adjustment (PGA) and Residential Exchange Program filings made today are annual adjustment filings and are separate from a general rate case and the settlement agreement reached in Aug. 2014 regarding base retail rates in Washington.

Purchased Gas Cost Adjustment (PGA)

The PGA is an annual adjustment that balances the actual cost of wholesale natural gas purchased by Avista with the amount already included in current rates - we do not mark up the cost of natural gas to meet customer needs. We are required to file the PGA each year, and costs can go up or down, based on the cost of wholesale natural gas.

Residential Exchange Program

The Bonneville Power Administration (BPA) Residential Exchange Program provides a share of the benefits of the federal Columbia River power system to the residential and small farm customers of the investor-owned utilities in the Pacific Northwest. We apply the benefits we receive, which typically fluctuate from year to year, to customers as a credit on their monthly electric bill.

In 2014, Avista received a higher level of benefits than it had projected in last year’s rate adjustment.

Residential Customer Bills Based on Average Usage

Electric – Residential Exchange Program

·Based on average usage of 965 kilowatt hours per month

·Decrease of $1.06 per month or 1.3 percent

·Monthly bill change from $80.09 to $79.03

Natural Gas – PGA

·Based on average usage of 65 therms per month

·Increase of $0.77 per month or 1.3 percent

·A revised monthly bill of $61.96

Current Natural Gas Bill

Approximately 55 percent of an Avista customer’s natural gas bill is the cost of purchasing and transporting natural gas and 45 percent of the bill is delivery of natural gas to our customers, by Avista.

Today, Avista announced that a full settlement agreement has been reached in Washington.

You may recall we filed a general rate request on Feb. 4, 2014 to increase electric and natural gas base rates in Washington that would support the ongoing need to expand and replace the facilities and equipment we use every day to serve our customers. Facilities like our 106-year-old South Channel Dam in Post Falls, Idaho and 106-year-old Powerhouse in Nine Mile, Washington. This settlement agreement would conclude the rate case and support these efforts.

This agreement has the full support of all parties involved in the rate case and is the result of these parties working together to agree on a settlement that is beneficial for our customers and our company.

What Does This Mean?

If approved, the proposed settlement agreement would increase electric and natural gas base rates as well as account for new and expiring rebates. Base rates are those that cover the total cost of providing electricity and natural gas service to customers. This includes generating and purchasing energy as well as the delivery of that energy to customers.

Here is what this looks like:

Item(s)

Details and Results

Base revenues

·Increase electric by 1.4 percent or $7.0 million

·Increase natural gas by 5.6 percent or $8.5 million

Expiring rebates

·Electric customers are currently receiving benefits from two rebates that are reducing monthly energy bills by 2.8 percent during 2014.

·These rebates will expire at the end of 2014.

New rebates

·Avista would provide a rebate to customers of $8.6 million over 18 months related to its sale of renewable energy credits, which would partially replace the expiring rebates and reduce customers’ monthly bills by 1.2 percent.

Energy Recovery Mechanism (ERM)

·A credit of $3.0 million from the existing ERM deferral balance would be returned to electric customers to offset the 2015 rate increase, which would reduce the overall electric billed rate increase from 1.4 percent to 0.8 percent.

LIRAP

·Funding available for Avista’s Low Income Rate Assistance Program (LIRAP) would increase by $333,000 as a result of the settlement.

The overall change in customer billing rates from the settlement agreement, including the expiring and new rebates is 2.4 percent for electric customers and 5.5 percent for natural gas customers.

Residential Customer Bills Based on Average Usage

Electric – residential customer using an average 965 kilowatt hours per month

·Total billed increase of $2.10 a month or 2.6 percent

·A revised monthly bill of $82.19

·An increase in the monthly basic charge from $8.00 to $8.50

Natural Gas - customer using an average of 65 therms per month

·Increase of $3.62 a month or 5.9 percent

·A revised monthly bill of $64.81

·An increase in the monthly basic charge from $8.00 to $9.00

The bill increase for each customer group (e.g. residential, commercial) may differ due to adjustments to better reflect the cost to serve each customer group.

The settlement has been filed with and must be approved by the Washington Utilities and Transportation Commission (UTC or Commission).

Today, Avista announced that a settlement has been reached to extend the current rate plan in Idaho. The settlement proposes that there would be no increase in base retail rates for customers prior to 2016.

What Does This Mean?

The extension of the current rate plan provides rate stability for customers and is the result of a collaborative process. It is an outcome that is beneficial for our customers and the company.

This includes:

·Unchanged base retail rates

·Maintained level of rebates that customers currently receive

·The opportunity to balance the recovery of costs of providing safe and reliable energy and the company’s opportunity to earn a fair return

Details of the Proposed Settlement

The details of the proposed settlement demonstrate what can be a complex process and topic.

·Replacement of two rebates that are set to expire on Jan. 1, 2015 that are currently reducing customers’ monthly energy bills by 1.3 percent on the electric side and 1.7 percent on the natural gas side.

·An estimated $3.7 million increase in pre-tax margin in 2015 for Idaho operations.

·Deferral of the majority of costs related to completion of Avista’s customer information system upgrades in 2015, as well as a change in the timing of expenses related to operations and maintenance (O&M) costs pertaining to its Colstrip and Coyote Springs 2 thermal generating facilities.

·Use of any deferral balance resulting from the 2014 Idaho earnings test to support up to a 9.5 percent return on equity (ROE) in 2015.

·If the company earns more than its currently authorized 9.8 percent ROE in 2015, 50 percent of the earnings above 9.8 percent would be deferred for future ratemaking.

PGA and PCA Adjustments

The proposed settlement applies to base rates. Avista will file annual rate adjustments including the Power Cost Adjustment (PCA) and Purchased Gas Cost Adjustment (PGA). These adjustments balance the actual costs of purchasing or generating energy and natural gas to serve customers and the amounts currently covered in rates, and are typically filed in the third quarter every year.

The settlement has been filed with and must be approved by the Idaho Public Utilities Commission (IPUC or Commission).

On March 13, 1889, Avista, formerly known as Washington Water Power, was incorporated eight months before the Washington Territory became a state. Today, the company is one of only three companies remaining in the state that are classified as Territorial Corporations – incorporated before Washington’s statehood. (See a Video of the presentation.)

The company began on the banks of the Spokane River with the Monroe Street plant, using hydropower to generate electricity for the growing city of Spokane Falls. Today, clean, renewable resources remain a significant part of the company’s diversified mix for energy generation.

Over the generations of providing energy services, one thing has remained constant for our company: We are honored to provide the energy and resources that have helped families and commerce be successful, whether it is in the home, enjoying the outdoors or building successful businesses. We’re proud to call each community we serve “home,” and we’re proud to be your partner in bringing energy for life.

History by RegionOur service territory spans more than 30,000 miles throughout Washington, Northern Idaho, and Oregon. The communities we serve have a rich history that we’re proud to be part of. We’ve captured some of these highlights in our 125th Anniversary Tabloid. You can view it online or download and print. We hope you enjoy this trip down memory lane by region.

Huntington Park in Downtown Spokane to open in May On May 2, 2014, Avista will celebrate the renovation of Huntington Park, property the company owns along the banks of the Spokane River, just west of Spokane’s City Hall. The renovation and enhancements include work on the walkways, grassy areas and structures to provide residents and visitors greater access to the river and views of the falls.

A new plaza at City Hall will be dedicated that day as a gift to Spokane in celebration of the company’s 125 anniversary. The new plaza will create open-air space for gatherings and river viewing, and includes two water features and a fire feature.

For the first time in more than 100 years, the view of the spectacular lower falls of the Spokane River will be opened up for easy viewing from the park, the plaza or the streets of Spokane.

Learn more about Huntington Park.

Salmon Chief to oversee Huntington Park

Artist Virgil “Smoker” Marchand created an inspirational Native American sculpture – Salmon Chief - to oversee Huntington Park, which will be dedicated in May.

Marchand says the sculpture represents a Native American tradition of a man who was appointed to ensure all area tribes received enough Salmon to make it through the winter. The Native American sitting atop his horse is raising the salmon like a blessing to the river. The horse and man statute is over 12-feet tall and took more than three weeks to make. Several other pieces will be added to the display in the spring.

Why would engineers from Bangladesh come all the way to Spokane? To see Avista’s smart grid upgrades up close and personal, of course.

Members of Bangladesh’s Rural Electrification Board are spending several weeks in Pullman learning about power engineering from Washington State University faculty. Their curriculum includes a field trip to Avista.

They learned about the investments Avista’s made to transform Pullman, Wash into the region’s first “smart city,” toured one of our state-of-the art substations and traveled to Spokane to meet with 3 Avista engineers who are leading our grid modernization projects. They saw first-hand how the switches, sensors and software we’ve installed are improving reliability for customers and enhancing the energy efficiency of our distribution system.

“We are working for the villagers,” said Abdul Aziz, an executive engineer with the Rural Electrification Board. “We are learning methods at WSU that will help us bring the villagers better service and an improved distribution system.”

On Thursday, March 13th Avista Utilities is hosting a public information meeting to update the community on details for the restoration and upgrade of the over 100-year-old South Channel Dam at the Post Falls Hydroelectric Development (HED). The meeting will take place from 6:30-8:00 p.m. in City Council Chambers at the Post Falls City Administration Building, 408 N. Spokane Street.

The public is invited to attend the event, which will outline the project details and construction plans. The presentation will be followed by an open Q&A session where you can talk with project experts. Q’emiln Park, including the boat launch, swim area, trailhead and pavilion, and the Spokane River between the Spokane Street Bridge and the boaters safety cables are expected to be open as normal this summer with limited exceptions.

The construction methods that will be used in the project were chosen to minimize disruption in the area, while protecting the safety of the public, environment and wildlife. The project, designed to restore the dam located on the south channel of the Spokane River near Q’emiln Park, is expected to begin this spring with construction completed by December 2014 and final road work and landscaping to be completed in spring 2015.

It’s easy to stay up-to-date on project information and impacts. Just send us an email at SpokaneRiverNews@avistacorp.com and you will be added to the distribution list for our email alerts. Be sure to type "Post Falls Updates" in the subject line and include your name and email address in the body text. You can also get timely project information, including the project fact sheet on our website. Just type “Post Falls Dam” in the Ask a Question field.

Inland Northwest homes and businesses typically see highest energy bills of the year in January and February. And this year isn’t any different as we have seen a long winter heating season. With sustained cold temperatures, heating systems run longer and work harder to keep the temperature at the level set on the thermostat which increases energy use.

In addition to energy use, the number of days in a billing cycle will also have an impact on energy bills. The average number of days in a billing cycle is 31, but it can range from 28 to 34 depending on the number of days in a month and any holidays. The number of days in a customer’s billing cycle is displayed on each monthly bill.

Heating and cooling a home can make up as much as half of annual energy use, so taking steps in winter to keep the warm air inside the home and the cold air outside can help manage energy use. Some easy ways to get started include:Set your thermostat to 68 degrees and lower it to 63 at night and when leaving the house. If you have a heat pump as the main heating source, a two to three degree setback is what is recommended. Installing a programmable thermostat will let you set it and forget it.

- Seal air leaks by installing door sweeps on exterior doors or putting a towel at the bottom of the door, caulking around windows and exterior doors, and installing foam insulators behind switch plates and outlet covers on exterior walls.

- Electric space heaters are more efficient when used to heat a smaller occupied space or in a common area that is generally cooler than the rest of the house.

- Limit using an open fireplace when it is extremely cold because the fireplace will draw heated air from your home and send it up the chimney.

Additional, there are low- and no-cost energy efficiency information, including rebates and incentives available for customers. You can also access tools that provide a month-to-month comparison of their bills with details on factors impacting each bill and other helpful information, such as a graph on two-year energy consumption.